Customer numbers and total assets at AJ Bell continued to climb despite the tough market backdrop, which has seen rivals like Hargreaves Lansdown falter.
The FTSE 250 platform group closed out the six months to 31 March 2022 with £74.1bn in assets under administration. This was a 14% increase from the same period last year but a drop of 2% from the end of December.
Year-on-year AUA growth was achieved despite a much tougher market backdrop, with the war in Ukraine, rising inflation and global supply chain constraints creating massive uncertainty.
Since the end of its last financial year in September, adverse market reactions have shaved £1.5bn off its total assets. Yet money coming into the business kept pace, with net inflows totalling £2.8bn during the interim, only slightly below the £3.1bn attracted in H1 2021.
Chief executive Andy Bell (pictured) said: “This is a very good result against a significantly more challenging market backdrop to that experienced in the first half of last year, when retail investor engagement and dealing activity was exceptionally high particularly in the direct-to-consumer market.”
AJ Bell winning market share as HL client numbers slump
Customer numbers have also continued climbing. AJ Bell had 418,309 customers at the end of March – up 21% from last year and a 5% increase from the previous quarter.
It has been particularly successful in winning market share in the D2C space, where it has been positioning itself to be a top player. Customers in this segment rose by 25,137 over the period to 266,182, a 10% jump from the end of September 2021.
Hargreaves Lansdown, its largest rival in the D2C space, has reported significantly weaker growth in new clients and business for the first four months of the year, which has weighed heavily on its share price.
AJ Bell’s shares were up nearly 6% on the back of the interim report at £2.67, however, this is still 30% lower than at the start of the year.
Tech and new product spend eats into profits
Weeks after the end of its interim period, AJ Bell launched Dodl, an investment app aimed at less experienced investors, at a third of the price of Hargreaves’ platform fee. This sits alongside its existing D2C platform, Youinvest.
It also plans to soft launch Touch, a “simplified, mobile-led platform proposition for the advised market”, later this year.
However, higher spend on marketing its brand, technology and new products has eaten into profits, which were 17% lower at £26.1m over the interim period.
Revenue margin on AUA was also lower than the comparative period due to normalisation of dealing activities and lower interest rates earned on customer assets. However, it expects this to pick up in the second half of the year as a result of the higher interest rate environment.
Transact attracts record net flows
On the advised side, Integrafin reported its investment platform Transact had shattered its records for gross and net inflows despite the “challenging environment”.
Net inflows were up £2.7bn in the six months to 31 March 2022 compared to £2.3bn last year, while gross flows were £4.1bn.
However, CEO Alex Scott noted group revenue of £67m was “dampened” by the fall in equity markets, which wiped £1.1bn off its total £53.5bn in funds under direction.
“That said, platform revenue has still grown at 11%, after fee reductions, as we have continued improving the price our Transact clients pay, making our service even better value for money,” he said.
Transact saw 9% growth in clients year-on-year, while the number of advisers using the platform rose 5%.
Integrafin said it had also seen “steady growth” from Time for Advice, which it acquired last January. The number of licences for Curo, its adviser back office software, increased 31% over the period, driving revenue growth to £1.7m.
